What we know today as Fair Trade stems from the 1940s when groups from North America and Europe established value chains for marginalized communities to help them sell their handicrafts in wealthy markets. Simply selling these goods at craft fairs or in catalogs began to plateau, and in 1988, the first labeling system for Fair Trade was developed. By placing a label on certified products, goods could be sold outside workshops and craft fairs and at stores where consumers shopped most. The label took away the inconvenience factor of seeking out Fair Trade goods, and also added transparency to a product where there typically was none.

As a tool for development and poverty alleviation, Fair Trade creates opportunities where there were typically were none, increases transparency in local and global markets, ensures a livable wage for the producer,supports gender equity, and works to end child labor and discrimination. Fair Trade also ensures that prices stay stable in an increasingly volatile market, and can help influence overall prices, premiums, and standards.

But sometimes, Fair Trade misses the mark. Some critics argue that the high costs of Fair Trade items don’t always translate into a drastically increased income for low-income farmers,instead only marginally improving incomes and slowing community development and modernization. Others argue that simply labeling a product Fair Trade doesn’t address mechanization or industrialization -changes that could eliminate the need to do back-breaking work instead of using technology (e.g. sorting coffee vs. using simple technologies to sort beans).

Fair Trade is still a great thing, though, it just could be better. Some organizations take the fair trade label and go a step further. I recently came across THRIVE Farmers, an organization that’s working to revolutionize the supply chain. THRIVE gives their farmers direct access to the marketplace to sell their coffee and by giving a farmer the ability to participate higher up in the chain, the farmer then takes home more value from the crop to their families.

I had the opportunity to speak to Ken Lander, one of THRIVE's founders and their President and Chief Origin Officer. As the COO, Ken seeks to find, advocate, and project the voice of the farmer and to tell the world that a new day has come in the world of coffee . THRIVE started as a collaboration between Ken, who had moved to Costa Rica to retire and run a coffee farm, and Alejandro, whose family farm was at a substantial risk of failure. Together, as Ken puts it, "we developed a model that allows farmers to take their coffee up through the value chain as close as possible to the end user. The farmer then shares the economic benefit of selling their coffee directly to the consumer." Because there's no intermediary, coffee farmers that are part of THRIVE's network see the return of growing, processing, and roasting their beans.

I asked Ken if he thought that the THRIVE model is better than the Fair Trade model. "To say that it's better isn't exactly a fair statement," he says, "because Fair Trade was designed to be an insurance policy so farmers didn't lose money on their coffee. It was never really designed to allow farmers to enjoy the value of their product as it goes through the value chain and down the line. What we've done is allow farmers access to markets that they previously didn't have access to." In making this point, Ken points out that typically, the last thing a coffee grower sees after the beans have been harvested is "the truck leaving his farm with the beans and the farmer holding a wad of cash in his hand. And it's when the truck leaves that the real value for coffee develops." Thus eliminating additional economic potential for a farmer, even if the beans were purchased at a fair price.

In THRIVE's model, the initial focus is providing economic sustainability to the farmers, while also working on social and environmental sustainability. Farmers in their network sign "Sustainability Pledges" that tell THRIVE they will not use pesticides or herbicides on their crops and pay their workers a livable wage. THRIVE focuses on economic sustainability first because "Until you sustain the farmer economically, the other two models (social and environmental) aren't going to work because the Farmer is going to feed his family first before he worries about using herbicides on his plants."

It’s important to remember that it’s still hard to find these companies that are taking fair trade a step further, but not to completely abandon buying fair products completely. Fair Trade, though it can have the tendency to veer toward marketing gimmick, is an important step toward helping coffee-growing communities earn the livable wages they deserve. Look for organic, rustic shade-grown coffee, and most importantly, a Fair Trade label.

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Wow, okay, where to start. 1. Fair Trade — along with the now 450 similar standards “setters” currently operating in Europe alone, are profit driven organizations. They marginalize smallholder farmers and are basically a non-tariff barrier to trade, making the very people who need market access systematically more poor with their proliferation. 2. please, please look in to valid, rigorous peer-reviewed academic works on the impacts of FT and similar certification schemes before propagating more pro-FT articles such as this. Even the most basic search will reveal the there is a huge amount of informed economist, public officials and representatives of farmers unions themselves who are very much against these exclusionary measures. 3. THRIVE is a decent example, albeit one that will never, ever, ever … ever scale up to a reasonable level considering that the average consumer is so price sensitive that they are scared of a 10 cent hike in a bag of coffee. FT coffee accounts for such a small market percentage, and its growth, price premium and benefits have either plateaued or declined in recent years. 4. Adding new layers, new schemes and new ideas simply perpetuates less market access for the poorest of the poor so each new “fix” for the FT idea actually hurt more than helps the most in need of these innovative – yet just simply ineffective – models. 5. When in doubt, donate your money to the Red Cross or another valued charity. 80%+ of the profits from FT remain in Europe or ‘the West” while the generally agreed upon share of profits that stay in the borders of the green coffee bean exporting countries is just under 2%. These are brilliant business models for the salaried workers in nice office buildings, for the traders and middle men, but they do not and will not ever benefit the target population. I won’t even mention the other huge issues that completely obscure this sector, but please, take a good look at independent, valid development studies that clearly show the many harmful effects of these standards before buying your next bag of overpriced beans. You are literally sending money to the wrong people and the reason why the system of value chain stakeholders exist, is that it is the most efficient (and will remain so) way to get product A to retailer B. If you would seriously like to make a rational difference, take a closer look at US and EU subsidies, including the CAP in Europe. Make your voice heard by speaking out against protectionist policies in developed countries, so that exporters of cash crops can create their own markets organically (not organic production… even worse), but grass roots, poor country led initiatives without US or EU based CEOs. Take a very close look on Google scholar and just start with “impact of fair trade” or “profit sharing in equitable trading” and then come back and re-read this article with those ideas in mind. You will be doing both yourselves a favor, and the smallholder farmers who starve every few years due in part to the FT system. Consider the demographics numbers, and then take a closer look at the so-called social-enhancements of a 50-person school here or there, or a water pump serving a community of 5,000. Keep in mind that SS-Africa will be over 1B people soon enough and will account for 50% of the next 2B people to join our funny planet. These systems; these standards orgs.; these certifications create a lot more evil than then erase but they are marketing geniuses and they have sold the majority of consumers on their benefits without ever accounting for their harm. Just try to find the financial statements of these … hmm … NGOs. They are non-existent. What does the budget line “marketing” stand for? Hotels, trips to safaris… who knows? How about “operations”? Inflated salaries, leather chairs, non-FT coffee for their own staff? It is a huge scam, an embarrassing one, and the most immoral act that I have seen put in place in my time here. Look around. Ask questions. Think critically. But most importantly, check the facts. Corner an economics or business ethics professor and repeat the questions I stated in this article. Take a look a the term non-tariff barriers to trade. It is a loophole to get around the WTO system of poor country concessions. It is darn brilliant on the part of the developed West… but it is also darn shameful when you see its effects. Please, please, thinks, reflect and consider. And when in doubt, do not buy fair trade. You are throwing a fraction of a penny at the smallholder and filling the wallets of the already-rich. Wow – that was tiring. People need to know what they are buying and if you would like to be a responsible consumer, spend 15 minutes reading a non-trade-related study on this topic and then email this magazine with questions (any of your concerns) demanding a Q&A session that does not skirt the obvious problems with FT.

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